Ok… So I realise this may not sound like my most interesting blog yet, but for anyone reading this who is an independent musician/songwriter/producer type, this could be incredibly useful to you.
I often find when talking to those who are trying to get into music, they are completely unaware of how to earn money by other means than being paid by the venue/promoter/event.
That’s not to say that royalties should REPLACE payment – far from it. There is a terrible situation in the industry these days where artists and performers are grossly underpaid if paid at all for their art. It is a sad state of affairs indeed, however you have a right to certain payments if you know where to get them.
The following information is an essay I recently got a high first for at university, so I am happy to say this information is accurate should you choose to read it and use it to your benefit. Please spread the word – musicians, songwriters and producers should understand this information and gain these extra funds AS WELL AS getting paid for all their hard work.
I hope you enjoy this little knowledge nugget… x ❤ x
“Identify the key copyrights within the music industry, and how the royalties that are generated are created and distributed to the rights holders. Identify all the appropriate collection societies and agencies involved in the process clearly.”
Copyright and royalty collection and distribution could be seen as complex and a little hard to understand. This essay aims to make clear the copyrights pertaining to the music industry and which societies and agencies are connected to the collection and distribution of the royalties for both written – lyrics and scores – and recorded musical works.
There are many ways in which royalties are generated and paid to the correct societies who then distribute them to the holders of the copyrights.
In order to understand fully how royalties are collected and distributed, it is important to first understand what the types of copyright are within the music industry and who is entitled to them. “There are three main types of copyright within music. These are composer, performer and producer. There are generally at least three rights holders in any piece of recorded music. There are other rights in sound recordings, but this list sets out the key rights which most indie companies need to be aware of; 1. The composer, 2. The performer, 3. The producer.” AIM (2014)
The composer is someone who writes the music, lyrics and melody, or it can be more than one person who writes one, or a combination of these elements, meaning the rights to the composition of a musical work may be shared by more than one party. The rights to record or perform the composer(s) works can be licenced to other parties through a licencing agreement, or by the composer signing the rights to a publisher who then signs the rights to a third party.
A composer is likely to be a member of BASCA – the British Association of Songwriters, Composers and Authors as the aim of this organisation is not only to help protect copyrights, but also to lobby for better royalty agreements where new formats such as streaming are involved. They also ensure the maintenance of fair income from better-known sources such as television and radio. “BASCA exists to support and protect the artistic, professional, commercial and copyright interests of songwriters, lyricists and composers of all genres of music and to celebrate and encourage excellence in British music writing.” BSCA (2014)
While it can cost £180 a year for a professional membership – those who commercially release music should take this option – there is a £20 option for music writers and students as a digital membership only that offers many of the basic facilities.
Even if the composer or lyricist is not performing on the recording, they will receive song writing royalties when the song is performed live whether this is in a venue, at a festival, on television or radio. They will also receive royalties if their song is recorded and subsequently played on radio, television, in clubs and bars, in stores of any kind, streamed, downloaded or bought in physical format such as CD or Vinyl. Royalties will also be paid if the song, music or lyrics are used for a movie, in a birthday card, on a DVD movie or box set or used for any internet or other syncing. In order to receive these royalties, in the UK a composer is usually a member of PRS or Performing Rights Society.
By joining PRS a songwriter or composer is assigning their copyrights for the term of the agreement in order for the association to collect royalties from the aforementioned streams on their behalf and then make combined payments to the author. PRS also collects royalties from other international collection societies such as JASRAC in Japan, ASCAP and BMI in America and SACEM in France, to name a few, in the event of radio airplay, movie showings and other performances in those territories. In such cases, the collection society in that country will collect those royalties and pass them on to PRS who then distribute them to the composers accordingly. It is important to note that as all licencing and publishing royalties are paid to PRS, in order for a songwriter to receive them, they must become a member. There is a one-off lifetime fee of £50 and it is certainly in the interests of music creators to take up membership.
Another collection society is VPL or Video Performance Limited Society. This is a society set up for the collection of royalties for performers and composers of the songs associated with videos. In the same way that PPL and PRS collect and distribute royalties, VPL is set up to be specifically for music videos. VPL licence the videos to bars, clubs, TV channels such as MTV and gyms – essentially, any venue or public place that wishes to play music videos publicly must pay a licencing fee to do so. This fee is collected by VPL who then distribute it to the rights owners of the videos. This is a subscription free organisation for the performers and composers.
A distinct difference between the rights of a composer and those of a performer are that a composer can stop the distribution of their song or a recording or performance of their song should they so choose, as long as they have not expressly signed over those rights to a third party. In most cases, a performer cannot stop the use of their performance, but they can receive royalties each time their recorded performance is played or sold, or when they perform it.
In order to receive royalties that are owed, performers in Britain can sign up to PPL, or Phonographic Performance Limited. By registering works they have performed on in a studio or live, musicians receive performance royalties from every download, stream, physical sale and synchronisation in much the same way as the composer. Therefore, if the composer also performs his or her works, they receive two types of royalties, thus being paid twice; once for writing or composing the song, and again for the performance. PPL is free to join.
Performers are well advised to become a member of The Musicians Union – MU. For an annual fee of £149 the MU offers free legal advice on every new contract, limited insurance of instruments on tour, advice on appropriate session musician fees and royalties, as well as information on everything from basic contract laws to how much a musician can charge for travel expenses. “As well as negotiating on behalf of musicians with all major employers in the industry, the MU offers a range of services tailored for the self-employed by providing assistance for the professional and student musicians of all ages” Musicians Union (2013)
The joining fee is considerably less for students at £20 a year and half price for members of AIM. The full membership fee is £149 a year.
The third and final type of rights concerning royalties involve production or Producers rights. If songs have been written and recorded independently then the royalties are split between performer and composer. However, if a record company produces the recordings, or advances monies to an artist in order to produce a recording then the performer and producer split that portion of the royalties 50/50. So, in the case of a composer also being the performer, if they are then signed to a record company who produces their record for them, they will receive full song writing royalties but will share the portion for performance equally with the producer or record company. “From a record company’s perspective, the producers’ rights in the sound recording are the most important, as they are the rights directly ‘owned’ by the record company, and for which the record company will earn royalties itself. The record company owns rights in the recording from the minute the recording is made and these rights exist independently of the rights of the authors and performers.” Phillips (2014)
As with performers and composers, there are unions and societies set up for the protection of the rights of producers. Most notably in the UK, MPG or Music Producers Guild was set up by music producers and sound engineers as a collective voice lobbying for rights for engineers, sound designers, producers, programmers, mixers and mastering engineers. As well as aiming to protect their rights, as PRS works for performers, MPG works behalf of producers etc., to ensure the best deals are struck regarding royalties and other appropriate and due payments, and that they have a voice which is collectively heard by the government. Producers can join the MPG free for a basic membership, but it can cost up to £125 a year for industry professionals needing to protect commercially released works.
Anyone involved in the process of the creation of the song, and therefore entitled to songwriters and composers royalties should be registered with PRS. It is the only way to ensure royalties are correctly collected and distributed. Radio play and other sync’s are tracked, and live performances can be registered, generating the royalties. All live music venues, clubs, bars, gyms and other public places playing music are legally bound to pay for a PRS licence. This is distributed amongst the members of PRS. Radio stations also pay licencing fees and submit playlists on a weekly basis to PRS so the composers and songwriters whose tracks get played receive the royalties. The same applies to videos played on TV or in Gyms – a licencing fee is paid to VPL who pass them on to PRS for the royalties to be distributed to the correct songwriters and composers.
In order to make sure the correct royalties are collected and distributed fairly between all parties, and that fair rates are negotiated for streaming and other performance or airplay, several trade unions have been set up specifically within the music industry to lobby on behalf of composers, performers and producers.
AIM, the Association of Independent Music represents over 800 record companies and independent artists, and strives to provide services that create new opportunities internationally. If new markets open up, AIM try to bring that information to the forefront to be maximised by the music community.
IFPI, the International Federation of the Phonographic Industry aims to promote the value of recorded music – something that has been in decline since the download industry became a mainstream method of accessing music. While streaming services such as Spotify have increased earnings and lowered piracy levels, the industry is still recovering from the initial shock of websites like Napster. “It was only a matter of time before college students began posting large collections of MP3s on college servers and internet websites where they could be downloaded by anyone” – Kusek and Leonhard (2005) p5
IFPI also aims to protect the rights of creators and producers of music and enforce these rights.
Finally, BPI – The British Recorded Music Industry (Formerly the British Phonographic Institute) represents all the large record labels as well as 300 independent organisations. Companies associated with BPI release 85% of music released in Britain.
Trade unions such as BPI, IFPI and AIM work with companies like the MU and MPG and come together with PRS, PPL and MCPS in order to protect composers, performers and producers’ rights. They continually work together and independently to increase the value of recorded music, find new revenue streams for their members and to ensure fair rates through future revenue sources, such as online streaming via Spotify and YouTube.
All revenue streams are created through licencing whether a venue is paying for a PRS licence to play recorded music or have live acts on, or a gym pays VPL a licencing fee to be able to play music videos, or a royalty percentage payment is made per download or greetings card purchase. All these payments go to the correct societies, who then distribute these funds accordingly to the composers, performers and producers whose music is played, sold or performed.
Although there are costs involved in membership of all the appropriate unions and societies, the benefits and potential earnings far outweigh the initial investment and the support, advice and networking opportunities are invaluable to anyone working in the music industry.
BASCA (2014) About Us [online]. Available at: http://basca.org.uk/about-us/ [Accessed 27-10-2014]
Boosey and Hawkes (2014) Earn From It – Collections Societies [online]. Available at: https://www.boosey.com/pages/publishyourself/collectionSocieties.asp [Accessed 27-10-2014].
BPI (2014) About Us [online]. Available at: http://www.bpi.co.uk/about-bpi.aspx [Accessed 27-10-2014]
Equity (2014) Equity and other Organisations [online]. Available at: https://www.equity.org.uk/about-us/equity-and-other-organisations/ [Accessed 27-10-2014]
Fresh On The Net (2014) How To Get Paid Part 1 – Royalty Collecting Societies [online]. Available at: http://freshonthenet.co.uk/2012/04/how-to-get-paid-part-1-royalty-collecting-societies/ [Accessed 27-10-2014]
IFPI (2014) About [online]. Available at: http://www.ifpi.org/about.php [Accessed 27-10-2014]
Kusek, D and Leonhard, G (2005) The FutureOf Music 1st ed.Boston: Berkley Press. p5
The Music Producers Guild (2014) About The Music Producers Guild [online]. Available at: http://www.mpg.org.uk/about-mpg/about-the-music-producers-guild/ [Accessed 27-10-2014]
Musicians Union (2013) About Us [online]. Available at: http://www.musiciansunion.org.uk/about-us/ [Accessed 27-10-2014]
C.Phillips (2013) AIM Journal – Indie Label’s Guide To Performance Rights [online]. Available at: http://www.musicindie.com/news/1302 [Accessed 04-11-2014]
PPL (2011) What We Do [online]. Available at: http://www.ppluk.com/About-Us/What-We-Do/ [Accessed 27-10-2014]
PRS for Music (2014) MCPS Royalty Payments [online]. Available at: http://www.prsformusic.com/creators/memberresources/MCPSroyalties/Pages/MCPS.aspx [Accessed 27-10-2014]
PRS for Music (2014) About PRS For Music [online]. Available at: https://www.prsformusic.com/Pages/default.aspx [Accessed 27-10-2014]
The MMF (2014) About The MMF [online]. Available at: http://www.themmf.net/about-us/ [Accessed 27-10-2014]
UK Music (2013) About Us [online]. Available at: http://www.ukmusic.org/about-us [Accessed 27-10-2014]